The financial regulations require hedge funds and wealthy investors that exceeded the $100 million holdings threshold to file a report that shows their positions at the end of every quarter. Even though it isn’t the intention, these filings to a certain extent level the playing field for ordinary investors. The latest round of 13F filings disclosed the funds’ positions on June 30th. We at Insider Monkey have made an extensive database of more than 873 of those established hedge funds and famous value investors’ filings. In this article, we analyze how these elite funds and prominent investors traded Bristol Myers Squibb Company (NYSE:BMY) based on those filings.
Is Bristol Myers Squibb Company (NYSE:BMY) going to take off soon? The smart money was getting less bullish. The number of bullish hedge fund bets were trimmed by 8 in recent months. Bristol Myers Squibb Company (NYSE:BMY) was in 73 hedge funds’ portfolios at the end of June. The all time high for this statistic is 136. Our calculations also showed that BMY isn’t among the 30 most popular stocks among hedge funds (click for Q2 rankings).
Hedge funds’ reputation as shrewd investors has been tarnished in the last decade as their hedged returns couldn’t keep up with the unhedged returns of the market indices. Hedge funds have more than $3.5 trillion in assets under management, so you can’t expect their entire portfolios to beat the market by large margins. Our research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 79 percentage points since March 2017 (see the details here). So you can still find a lot of gems by following hedge funds’ moves today.
Peter Rathjens of Arrowstreet Capital
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Do Hedge Funds Think BMY Is A Good Stock To Buy Now?
At the end of the second quarter, a total of 73 of the hedge funds tracked by Insider Monkey held long positions in this stock, a change of -10% from the previous quarter. On the other hand, there were a total of 136 hedge funds with a bullish position in BMY a year ago. So, let’s review which hedge funds were among the top holders of the stock and which hedge funds were making big moves.
More specifically, Berkshire Hathaway was the largest shareholder of Bristol Myers Squibb Company (NYSE:BMY), with a stake worth $1757 million reported as of the end of June. Trailing Berkshire Hathaway was Viking Global, which amassed a stake valued at $756.3 million. Renaissance Technologies, OrbiMed Advisors, and Millennium Management were also very fond of the stock, becoming one of the largest hedge fund holders of the company. In terms of the portfolio weights assigned to each position Birchview Capital allocated the biggest weight to Bristol Myers Squibb Company (NYSE:BMY), around 31.82% of its 13F portfolio. HealthInvest Partners AB is also relatively very bullish on the stock, setting aside 9.31 percent of its 13F equity portfolio to BMY.
Due to the fact that Bristol Myers Squibb Company (NYSE:BMY) has faced falling interest from the entirety of the hedge funds we track, it’s easy to see that there were a few funds that slashed their entire stakes in the second quarter. It’s worth mentioning that Prashanth Jayaram’s Tri Locum Partners cut the largest investment of all the hedgies followed by Insider Monkey, worth an estimated $24.7 million in stock, and Anand Parekh’s Alyeska Investment Group was right behind this move, as the fund cut about $20.8 million worth. These moves are intriguing to say the least, as total hedge fund interest fell by 8 funds in the second quarter.
Let’s check out hedge fund activity in other stocks similar to Bristol Myers Squibb Company (NYSE:BMY). We will take a look at Charter Communications, Inc. (NASDAQ:CHTR), Citigroup Inc. (NYSE:C), Union Pacific Corporation (NYSE:UNP), Royal Bank of Canada (NYSE:RY), Sea Limited (NYSE:SE), NextEra Energy, Inc. (NYSE:NEE), and Anheuser-Busch InBev SA/NV (NYSE:BUD). This group of stocks’ market valuations are closest to BMY’s market valuation.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| CHTR | 75 | 19486659 | 1 |
| C | 87 | 6155245 | -3 |
| UNP | 69 | 5034926 | -6 |
| RY | 18 | 905415 | 0 |
| SE | 104 | 12209916 | 6 |
| NEE | 59 | 2686533 | -4 |
| BUD | 18 | 1234449 | 0 |
| Average | 61.4 | 6816163 | -0.9 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 61.4 hedge funds with bullish positions and the average amount invested in these stocks was $6816 million. That figure was $5203 million in BMY’s case. Sea Limited (NYSE:SE) is the most popular stock in this table. On the other hand Royal Bank of Canada (NYSE:RY) is the least popular one with only 18 bullish hedge fund positions. Bristol Myers Squibb Company (NYSE:BMY) is not the most popular stock in this group but hedge fund interest is still above average. Our overall hedge fund sentiment score for BMY is 45.1. Stocks with higher number of hedge fund positions relative to other stocks as well as relative to their historical range receive a higher sentiment score. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 5 most popular stocks among hedge funds returned 95.8% in 2019 and 2020, and outperformed the S&P 500 ETF (SPY) by 40 percentage points. These stocks gained 26.3% in 2021 through October 29th and beat the market again by 2.3 percentage points. Unfortunately BMY wasn’t nearly as popular as these 5 stocks and hedge funds that were betting on BMY were disappointed as the stock returned -11.2% since the end of June (through 10/29) and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 5 most popular stocks among hedge funds as many of these stocks already outperformed the market since 2019.
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Disclosure: None. This article was originally published at Insider Monkey.
